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Fixed Deposit for Minor – Process to Open Minor FD Account
Posted on Friday, February 23rd, 2024 | By IndusInd Bank
Securing a child’s future is the parents’ responsibility. It involves thoughtful planning, strategic investments, and a commitment to providing a solid financial foundation for their lives.
Opening a fixed deposit account for minors allows you to systematically save money for significant milestones like education, career or marriage. Fixed deposit for children helps in shaping their financial future and fostering responsible financial habits.
Options for Fixed Deposit Accounts
- Traditional Fixed Deposit: It is a type of savings account offered by banks where you deposit a lump sum of money for a predetermined period at a fixed interest rate. At the end of the tenure, you receive the principal amount and accumulated interest.
- Reinvestment Option in Fixed Deposit: In this, the interest earned on the fixed deposit is automatically added to the principal amount at regular intervals. As a result, the total investment grows progressively, leading to higher overall returns.
Features and Benefits of IndusInd Bank Fixed Deposits
- Depositors can choose the duration of the FDs, ranging from a few months to several years. The tenure for IndusInd Bank Fixed Deposit ranges between 7 days to more than five years.
- Interest can be paid at regular intervals (monthly, quarterly, annually) or reinvested in the deposit.
- Many FDs offer the option to renew the deposit automatically at maturity with the accrued interest.
- IndusInd Bank FDs provide security and liquidity to your investments, as returns are not subject to market fluctuations.
Process of Opening an Offline IndusInd Bank Fixed Deposit Account for Minors:
- Visit the bank you want to open the Fixed Deposit account with and obtain the application form.
- Fill out the application form accurately. Provide details about the minor and the guardian who will manage the account until the minor reaches a specified age.
- Submit the necessary documents of the minor and the guardian, such as the minor’s birth certificate, PAN card, Aadhar card, passport, etc.
- Choose the tenure for the FD and specify whether you want the interest to be reinvested or paid out periodically.
- Decide on the initial deposit amount and be ready to fund the FD account.
- Once verified and approved, the bank will issue a fixed deposit receipt or certificate containing details of the deposit.
Why Open Fixed Deposits for Minors?
- It enables one to start financial planning for their child’s future, such as education expenses or other major life events.
- Minor fixed deposits may offer higher interest rates compared to regular savings accounts, helping to grow the investment more effectively. Interest rates on a fixed deposit range between 3.50% and 7.50%, whereas a savings account offers between 4% and 6.75%.
- Minor fixed deposits are considered low-risk investments, providing a stable and secure option for preserving funds for the minor.
- Money deposited in an FD has a lock-in period, discouraging impulsive spending. This instils financial discipline in the family.
- Involving minors in financial decisions and teaching them about saving at a young age can contribute to their financial literacy and responsibility.
Conclusion
Fixed deposits for minors offer a secure investment option with predetermined interest rates and tenures, promoting financial discipline and long-term savings. It is a prudent choice for parents seeking stable returns for their child’s future.
Click here to open a savings account for minor with IndusInd Bank today!
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
